Nearly every single S&P500 company is majority owned by institutional investors, with 88% of them having one of the Big Three (Vanguard, Black Rock and State Street) as their top investor, and with the only exceptions being Tesla, Amazon, Alphabet, Berkshire Hathaway, Facebook, Oracle, Walmart, Comcast and Kraft-Heinz where insiders are still the top shareholders. The Big Three has 15-20% controlling stakes in nearly every large American corporation, and through the means of coordinated proxy voting, dictates the policies of the board of directors.
These institutional investors are financial capitalists who see the companies as investment vessels, not as industrial capitalists who want to grow their respective industries. They could not care less if the companies go bankrupt as long as they see a return in short term profit. Vanguard, for example, has a deep $7.7 TRILLION assets and do not care at all if some of their businesses go down.
Then you have private equity firms, also known as “corporate raiders”, who raise high stake loans to perform “leveraged buyouts” of established companies. They conduct “financial engineering” i.e. paying themselves dividends, lower wages and force overtime without pay, layoff employees, skirt labor laws, refuse to honor contracts, strip off assets and saddle the companies with debt until these are forced to declare bankruptcy. Then, like true parasites, they ditch the host and jump on to the next companies to suck off their wealth built up over the past century.
You also have venture capitalist (VC) firms that leveraged Obama’s Zero Interest Rate Policy (ZIRP) era after 2009 to raise easy capital to profit from tech/software companies. You can read this article about how Andreesen Horowitz perform their operations to destroy software startups:
The thing about these two strategies for VC is that they both can turn a profit. That second one, though, works a little differently than the first. Regardless of whether the company succeeds, pumping its valuation before selling your shares can mean you will make money, even if the business itself doesn’t survive in the long term. But hyping a startup isn’t something a VC can do alone. He needs help. He needs the media.
It happened to Groupon. It happened to Substack. It happened to Imgur. And many others, and it will happen to Reddit and all other software companies in America.
This is by no means only restricted to software companies though, for the rot of finance capitalism had already been sown since Reagan’s and Clinton’s deregulation era that massively expanded Wall Street’s influence, and subsequently fueled most prominently by Obama’s low interest rate monetary policy for them to encroach into every crevices of American industries.
Cisco, used to be the world’s leading telecommunications company, now a shadow of its former self after being financialized by Wall Street.
Boeing, used to be the world’s leading aviation engineering company, now churning out defective products that nearly never happened in its history, after being financialized by Wall Street.
Intel, used to be the world’s semiconductor pioneer, now struggling to keep up with Taiwan’s TSMC and South Korea’s Samsung, after being financialized by Wall Street.
And this is the fate of America - a financial oligarchy will continue to devour and strip off every remnant of the American industries built up over the past centuries, and there is nothing to stop this in its tracks.
The complete financialization of the US economy.
Nearly every single S&P500 company is majority owned by institutional investors, with 88% of them having one of the Big Three (Vanguard, Black Rock and State Street) as their top investor, and with the only exceptions being Tesla, Amazon, Alphabet, Berkshire Hathaway, Facebook, Oracle, Walmart, Comcast and Kraft-Heinz where insiders are still the top shareholders. The Big Three has 15-20% controlling stakes in nearly every large American corporation, and through the means of coordinated proxy voting, dictates the policies of the board of directors.
These institutional investors are financial capitalists who see the companies as investment vessels, not as industrial capitalists who want to grow their respective industries. They could not care less if the companies go bankrupt as long as they see a return in short term profit. Vanguard, for example, has a deep $7.7 TRILLION assets and do not care at all if some of their businesses go down.
Then you have private equity firms, also known as “corporate raiders”, who raise high stake loans to perform “leveraged buyouts” of established companies. They conduct “financial engineering” i.e. paying themselves dividends, lower wages and force overtime without pay, layoff employees, skirt labor laws, refuse to honor contracts, strip off assets and saddle the companies with debt until these are forced to declare bankruptcy. Then, like true parasites, they ditch the host and jump on to the next companies to suck off their wealth built up over the past century.
You also have venture capitalist (VC) firms that leveraged Obama’s Zero Interest Rate Policy (ZIRP) era after 2009 to raise easy capital to profit from tech/software companies. You can read this article about how Andreesen Horowitz perform their operations to destroy software startups:
It happened to Groupon. It happened to Substack. It happened to Imgur. And many others, and it will happen to Reddit and all other software companies in America.
This is by no means only restricted to software companies though, for the rot of finance capitalism had already been sown since Reagan’s and Clinton’s deregulation era that massively expanded Wall Street’s influence, and subsequently fueled most prominently by Obama’s low interest rate monetary policy for them to encroach into every crevices of American industries.
Cisco, used to be the world’s leading telecommunications company, now a shadow of its former self after being financialized by Wall Street.
Boeing, used to be the world’s leading aviation engineering company, now churning out defective products that nearly never happened in its history, after being financialized by Wall Street.
Intel, used to be the world’s semiconductor pioneer, now struggling to keep up with Taiwan’s TSMC and South Korea’s Samsung, after being financialized by Wall Street.
And this is the fate of America - a financial oligarchy will continue to devour and strip off every remnant of the American industries built up over the past centuries, and there is nothing to stop this in its tracks.